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DeFi Fund: What is the return on investing in 10 DeFi protocols?

DeFi Fund: What is the return on investing in 10 DeFi protocols?

With 2020, a new decade has started. A decade, that we believe will also bring new advancements in the field of blockchain-based finance. Instead of just hypothetically writing about decentralized Finance (DeFi), we made a small investment of 1000€ into ten carefully selected DeFi protocols on the 1st of January 2020. Think about it as a lazy-man’s educational DeFi fund. No trading. No selling. We will track the performance throughout the year and write regular reports about the fund and do deep dives into the DeFi protocols. Authors: Victor von Wachter, Maximilian Feldmeier, Philipp Sandner

The DeFi fund incorporates 3 lending instruments, 3 utility tokens and 4 derivatives/exotic tokens All DeFi protocols invested are Ethereum smart contracts. The projects have been selected by degree of decentralization, transparency, true non-custodianship, user adoption, media popularity, innovation Setting up took only 2 hours applying MetaMask as a popular wallet After two weeks the fund significantly outperforms traditional asset classes What is the benefit of investing in DeFi?

2019 saw the rise of a flashy newcomer within the blockchain narrative: DeFi. Broadly speaking, DeFi is an ambitious attempt to decentralize core traditional financial use cases like trading, lending, investing, wealth management, payment and insurance on the blockchain. Simply speaking, DeFi can be described as a set of interconnected smart contracts. DeFi protocols are financial instruments like LEGO bricks which can be plugged together. Utilizing the Ethereum blockchain as the core infrastructure, DeFi is based on decentralized Applications (dApps) or protocols. As with LEGO bricks, every dApp can be uniquely combined creating a peer-to-peer, open-source financial network.

The projected benefits of DeFi are true decentralization, censorship resistance, worldwide participation regardless of social st...

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